Securities and Commodities Fraud

Two SEC whistleblowers have been awarded a total of $50 million for exposing conflict-of-interest problems with investment advisors at JPMorgan Chase Bank

The Securities and Exchange Commission announced the awards but did not offer any details of the case. However, lawyers for one whistleblower revealed it involved a 2015 $267 million settlement with the bank.

JPMorgan Chase Bank advisors invested clients’ money in JPMorgan hedge funds and mutual funds without properly disclosing the conflicts of interest, According to the 2015 settlement, some of the funds produced less revenue than other investments.

In an announcement of the award, Jane Norberg, head of SEC’s whistleblower program, wrote that insiders can “be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets.”

One whistleblower won $13 million and the other received $37  million. The SEC announcement noted that the latter award was the third-highest award to date after the $50 million March 2018 award and a September 2018  $39 million award.


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its largest whistleblower awardMajor breakthrough for whistleblowers reporting commodity frauds

WASHINGTON, D.C. | July 12, 2018—The Commodity Futures Trading Commission (CFTC) today announced its largest whistleblower award to-date in a commodity fraud case.  According to the Commission, it issued “an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action”
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The return from Thanksgiving holiday has been tough for advocates of whistleblower protections and common sense financial regulation. Last week, the Supreme Court heard Digital Realty Trust v. Somers, which concerned whistleblower protections under the Dodd-Frank Act. The Court appears poised to eviscerate internal whistleblower protections, as the justices seemed sympathetic to Digital’s argument that whistleblowers must report alleged misconduct to the Securities and Exchange Commission (SEC) to avail themselves of anti-retaliation protections. As the National Whistleblower Center explained in its highly-praised brief, both foundational rules of statutory construction and pragmatic policy concerns should push the Court to rule in favor of the whistleblower. Unfortunately,  Supreme Court watchers are currently predicting the opposite: a unanimous decision against whistleblower protections.
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This term the U.S. Supreme Court will decide Digital Realty Trust v. Somers (Digital), one of the most important whistleblower cases to come before the Court in 20-years.   The Chamber of Commerce and its Wall Street allies want to strip all employees who report securities frauds internally to their compliance departments or managers from protection under the Dodd-Frank Act’s (DFA) whistleblower law.
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Corporate Attack on Internal Whistleblowers Rebutted

In an article published on June 22, 2017,  by Law360, Stephen M. Kohn, executive director of the National Whistleblower Center (NWC) and partner in the whistleblower rights law firm of Kohn, Kohn and Colapinto, revealed previously unknown information regarding the legislative history of the anti-retaliation language in the Dodd-Frank Act (Dodd-Frank).  A controversy exists regarding these provisions which has resulted in a split in the U.S. Courts of Appeal interpreting the scope of protected activity. 
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Washington, DC, November 16, 2016. The Securities and Exchange Commission (SEC) Whistleblower Program had its most successful year to date in 2016. The agency, which issued its annual report to Congress today, reports it issued awards totaling over $57 million in 2016—higher than all award amounts issued in previous years combined. The Office of the Whistleblower (OWB) received over 4,200 tips this year, which is a more than 40 percent increase in whistleblower tips since 2012. In addition, the SEC took action in its first ever stand-alone whistleblower retaliation case.

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Washington D.C. October 9, 2016.  Och-Ziff Capital Management Group (Och-Ziff), A New York-based alternative investment and hedge fund manager, agreed to pay a combined total amount of U.S. criminal and regulatory penalties of approximately $412 million to settle charges it violated the Foreign Corrupt Practices Act.  In separate announcements yesterday the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) each described the actions of Och-Ziff which led to the charges the company violated the FCPA.
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The Securities and Exchange Commission (SEC) announced that Jane Norberg will now head its whistleblower office.  The SEC Office of the Whistleblower reviews whistleblower tips, evaluates whistleblower award claims, and makes recommendations on whether claimants should receive an award for their information. Ms. Norberg has served as acting chief since the departure of Sean McKessy in July.
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The Securities and Exchange Commission (SEC) announced August 30, 2016, that it has awarded over $100 million to whistleblowers since its inception in 2011.  The SEC’s whistleblower program was established by Congress to incentivize whistleblowers with specific, timely and credible information about federal securities law violations to report to the SEC.

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